Friday, September 25, 2020
Sunday, April 14, 2019
You have spent days looking for that dream home…you find it! You buy it. You do inspections, get a mortgage, order a survey and secure insurance. So now you are happy and can’t wait to move into your perfect home. Except…
After signing the closing documents, you go look at the house and it does not look the same. Your agent hands you a gift card and tells you what a wonderful property you bought…you are puzzled…and not so happy.
Appliances that you thought were to stay with the house are missing… Seller took the waterbed so now carpet is missing where the bed was. There are holes in the wall where the pictures were. The inground pool is green and the grass is 3 feet high. Seller agreed to repaint the family room and instead did some spot touch ups with gloss paint on the walls that had flat paint. Ugh…why bother?
If you think that does not happen, think again…
Are you totally stuck? Or can you renegotiate? You are seriously heartbroken and unsure of what to do. We do know what to do and always fix your problem BEFORE YOU CLOSE. If there are surprises found, we address those before you, the buyer, sign on the dotted line. The property must be in the same condition as when you bought it.
The seller cannot remove light fixtures or replace ceiling fans with something of lesser quality. If the condition of the property has changed, you do not have to accept something of reduced value. Your buyer’s agent should negotiate a resolution…maybe…
If you hired a true buyer agent, they will take care of these conflicts for you. If you hired a transaction broker, chances are that you are left on your own. First let’s talk about what can happen, and then we will give you the solution.
Meanwhile, here are 3 true stories about what did happened and how we solved it:
1. Seller takes the appliances: Seller removes (steals) the washer, dryer, and refrigerator. We do a walk thru and the top of the line appliances are simply gone. Yes, they are listed in the purchase contract. The contract clearly states that the appliances stay with the home. The seller pretends that they don’t understand and are already across state lines with your appliances
What the listing agent said: “Oh well, the seller was not planning on leaving it.”
What we said: The buyer bought the house with the appliances, so the seller will have to credit buyers so they can buy new ones. The replacements should be of equal value to what was taken.
Final Resolution: Seller credited the buyer $6,000 for the theft of the appliances. Even if someone else steals the appliances, it is still the responsibility of the seller to correct.
2. Seller removes/replaces items: Seller removes home items that are attached: The security system, bathroom mirror, ceiling fans, lighting fixtures. We have even had a seller remove some of the pavers in the driveway…can you believe it?
What the listing agent said: “What was the seller thinking?”
What we said: We did not have to say much because the listing agent “got it” and was outraged with the sellers. I loved her, she was one of a kind who understood that the contract rules.
Final Resolution: Seller had to pay to have everything put back to its original condition. Even if the neighborhood kids trash the house, it is still the responsibility of the seller to fix. Seller cannot replace anything in the home, unless the buyer agrees.
3. Seller leaving trash: Seller leaves their unwanted trash, broken computers, old furniture, garbage and the home is left filthy. They also left cans of toxic material and even hundreds of pounds of broken windows in the yard.
What the listing agent said: “Seller did not have time, they tried to clean…errr what dirt?.”
What we said: Buyers should not be required to clean up the sellers dirt on a $450,000 home. The contract says that the property is to be left “clean”…that also means the inside of the stove and refrigerator.
Final Resolution: Seller paid professionals to haul off his garbage and clean the home spotless.
These true stories are just the tip of the iceberg…more serious things have happened. Conflicts and problems happen in every real estate transaction. Many sellers and their agent do not bother to read what the contract says and just operate on what they “think” or have done in the past..that is not acceptable. There are terms of the contract that prevail and then there is common sense. Buying a house does not mean that you must buy it full of junk or missing pertinent items like appliances. The most important thing is to hire the right agent…very few brokers in Florida promote the buyers best interest. We do…
So what can you do as a home buyer to protect yourself?
1. Hire a TRUE Buyers Agent…not a Florida Transaction Broker. You need an Exclusive Buyer Agent that works only in a buyer agency office. They solely work in the buyer’s best interest and never represent the seller. A transaction broker is only a “facilitator” with no loyalty to you. They cannot advocate for you. You need a dedicated buyer agent in your corner to always provide you the best options and resolve negative issues for you.
2. Do a walk thru prior to closing. Everything should look and be working the same as when you bought the property and did your home inspections. If something stopped working or the ceiling has some new stains, these issues are still a seller problem.
Don’t believe it, if someone is telling you that you signed an “as is” contract and it is now too late. If there are new deficiencies that have popped up since you signed the contract, it is not your obligation to accept.
The Florida Far-Bar contract allows you to do a walk thru to check the condition of the property before you pay for the house. It also allows you another follow-up walk thru if needed. The seller must leave the utilities on for the home buyer.
We always do a walk thru prior to closing and if the buyer is not available, we still do the walk thru. That is what a true buyer agent does. We take no short cuts.
3. What can you do now? Renegotiate the problem. Until you already sign the closing documents and the money is funded, it is still the sellers problem to fix. If something is not right it needs to be taken care of. We always work to fix the matter of contention in the buyer’s best interest.
Let’s face it, if you are buying a fixer upper property that you plan to renovate, then it is considered acceptable if “things” are not perfect. However, if you are buying a nice house and more importantly paying top market value, then you should not be expected to start fixing problems that were not there 30 days ago when you bought the property.
Worried about buying a home? We can help…we only and always are on your side. We will make sure that you do not have any outstanding issues BEFORE you close. CALL Buyers Broker of Florida for a confidential and complimentary chat about your best home buying options. 407-539-1053.
In case you can not view this video here, please click the link below to view Can You Renegotiate Your House on Closing Day? on my YouTube channel: https://www.youtube.com/watch?v=Frt_dFMnBXs&feature=youtu.be
Sunday, March 03, 2019
Truth about Florida’s Real Estate Flippers is something most home buyer are not aware of. Home Buyers love pretty houses…buyers like new stuff. Buyers like to see updated homes. But is the “new camouflage” really worth it? Are these renovations hiding more secrets than home buyers suspect?…you better believe it!. True stories below…
What is House Flipping?
House Flipping is a quick-profit strategy in which an investor purchases real estate under market value and improves the property in order to sell at a higher price. A flip house is defined as a home that is bought and sold within 12 months. How fast a house will sell depends upon the curb appeal of the property. Statistics show that “move-in-ready” homes sell 12% faster.
Orlando has a very healthy real estate market, which is ripe for anyone wanting to flip a house, so this can be a lucrative profit strategy. Flippers just buy a house that is ugly, or outdated or in poor condition and fix up the cosmetics and make it appear good. It may not be good, but it just needs to appear that way. Just slap some cosmetic fixes on troubled properties and ignore pulling permits.
The typical flipper does not care if something is not done correctly…they only care if it superficially looks good. Their goal is to make a quick sale with a bigger profit. Close the deal quick and buy another house to do it over again. The main focus is making as much money as they can in the shortest amount of time. Flippers don’t care if their renovation falls apart in a month or the termites start appearing again. Fast money is the name of the game…
Flippers don’t like to pull permits…
It is a fact that in Florida almost all renovations need permits to be pulled and be inspected by the city. A permit is an official approval issued by the local government that ensures that the rehab complies with local standards of construction.
You cannot just put on a new roof without a permit. You also cannot open walls, add on, close in rooms, raise ceilings or switch out the plumbing without pulling a permit and letting the city come and inspect. The last thing a “flipper” wants is to have the city inspector involved. If they get a permit for one thing, the city will have to come to the property to finalize it. That’s when they will come to the house to inspect and notice all the other improvements that permits were not pulled for. They will now require other permits to be pulled…which is exactly what the seller wants to avoid.
Flippers typically do not pull permits because they do not want to take the time, spend the money, or most importantly…they do not want any city official scrutinizing their work. Chances are it will not pass inspections and to a flipper “time is money”.
Typically, if the roof has a leak, the flipper will fix the leak and use “Kilz” to cover up the stains on the ceiling. To make matters worse, the flipper or their agent will say the roof has never leaked. Or better yet, they will say nothing at all…instead they will write across the sellers disclosure….”SELLER KNOWS NOTHING, THEY NEVER LIVED THERE.” So much for the state requirements for disclosing material deficiencies…that is non-existent with a flipper…and some listing agents also mistakenly believe that “house flippers” do not need to disclose anything because they never lived there.
So much for that baloney. I own several rental properties that I have never lived in. Yet I pay for the repairs, so I know which roof is leaking, which septic tank needs to be pumped, and which toilet is loose. In other words every owner knows something…especially if they are tearing into walls, and buying material to renovate. Don’t buy into the bogus story that the seller knows nothing…
I was at one time a house flipper…
Many years ago, I was an occasional house flipper. It did not last long because I was not comfortable fixing only the cosmetics, I wanted everything to be perfect. This was contrary to making a steady profit.
But here is what I learned: Every house has more problems than you can spot at first look. One repair usually leads to the discovery of another problem, and more repairs are always needed.
It goes like this…you fix some plumbing in the wall and find electrical wires that are exposed…you then go to fix the wires and find out that the outlets that it goes to are not working…so you go to fix that and find out the house has termites. Or you go to paint the porch and fall through the rotten boards. Now you have a dilemma…do you just putty in the rotten stuff and cover it up with a fresh coat of paint or do you remove the whole porch and put on a new one??
If you are the homeowner living in the home, you will fix it correctly. However, if you are a professional “house flipper” you will putty it up, paint it and cheap out.
House flipper nightmare stories
I actually have two recent stories which are making me rethink the decision of even showing flipper properties. The problem is that many buyers ask to see those properties because as I said at the beginning…buyers want pretty upgraded homes. Once they see it, it becomes an emotional purchase, not a business decision. They see it, they like it and want to buy it.
Flipper house #1: Owner agent is also the flipper, who hired others to fix up the house. My initial thought was that the owner did more renovations then most flippers, so at first appearance it did look good. The buyer goes to contract. As part of the home purchase I requested (in the contract) all receipts, permits and warranties for the home buyer. Part of that is already in the small print in the contract, but I additionally requested it so that the seller would be aware that we really do want it and not overlook it. Seller was not happy that I wanted all the receipts…
We take the next step and do home inspections.
The house did have a new roof that supposedly had a permit that was pulled, although the owner/agent did not provide me with one. I say “supposedly” because I could not find it in the permitting for the city and the county never responded to my inquiry. OK, let’s assume that they did pull a permit and it was done properly. Meanwhile during the home painting on the exterior, someone spilled a can of white paint on the roof which is easy to see from the ground. Lets face it, to try to remove it would result in also removing some roof granules which are important to the integrity of the shingles. A dark new roof with spilled white paint…not a good look.
The property had also been re-plumbed…with no permit pulled. There was still a leak.
The bathrooms looked like they were newly remodeled, but on closer inspection the shower and tub were not new…only painted with epoxy paint which made it appear new.
The kitchen while new, was not properly attached to the wall and the new appliances were bottom of the line in quality. The sliding patio doors were hard to open and needed new rollers.
Interior paint appeared OK until you noticed that all the windows had peeling paint. Apparently, the painter painted white latex paint over oil based dark windows…which does not stick. The front door jambs had rotten wood that was simply painted over.
The new screening had spline coming loose in several places. Deck needed to be repainted as the painter did a splotchy job.
So the buyer requested that the seller fix the things that the agent/owner/flipper stated were “new”…they only asked for the items that the seller/agent had paid others to fix. The response from the agent/owner/flipper was NO! A shocking response since I already had some receipts that showed the seller/owner had already paid for these improvements. Why not simply get the workers/handy persons back to the house to finish the job they were already paid to do?
Buyers were already losing enthusiasm for the purchase when they got the survey report. The survey showed that 3 neighbors were encroaching on their property…one with a pergola that was 5 feet inside the new buyers property line. Flippers usually do not do surveys, so they do not consider encroachments important. The buyers did not want to start their life in Florida by alienating the 3 neighbors by forcing them to move fencing off buyers property.
Buyers cancelled the contract. Now, you may think that all the deficiencies were minor. True, but buyers were paying top dollar for a complete “renovated” home which was not completed properly and not what was advertised.
The agent/owner/flipper was shocked! He did not understand or believe that the buyer would cancel. Had the buyers chosen another agent, more than likely another agent would have glossed over the deficiencies and pressured the buyers to close. There are not too many agents like us who care whether or not the buyer is getting all they contracted for. Which is the best reason for home buyers to always work with an Exclusive Buyers Agent
Seller later offered to reduce the property by $8K, but was “too little-too late” for the buyers. They were off to another property.
Flipper house #2
This house was larger and looked like it had good possibilities. When we looked at the house, there was a “contractor” aka “handy man” working on some things. The pool was green and there were electrical wires hanging out everywhere in the pool area. To me it looked like there was a bunch of garbage in the bottom of the green pool, but it was hard to tell. I was told it was just my imagination…
Inside the home, the sellers had already put in a new kitchen and new appliances, which I admit looked good. However the doors and drawers did not close properly and some needed adjusting.
Although the house appeared like there were a lot of improvements, many were in the stage of being only half finished and upon closer examination revealed many unfinished problems: The master bath had new tile placed over old tile and was left unfinished. A new hot water was placed on a wooden box that was collapsed etc.
The listing agent was in my opinion…not on top of things. The owner/seller lived in another state and it was obvious the agent was afraid to call or verify anything with him.
For example, the roof was “new”, but no permits were pulled. The agent said it was because the roof was leaking (it was not) and he said the roofer put the new roof on in a 2-day weekend. Sounded fishy since there were no water stains on the ceilings which had not yet been painted. Besides they could have applied for a permit following the work being completed. Nonetheless, we were guaranteed that there was a roof “warranty”.
I requested the roof warranty, but no one seemed to have one. When I pushed for someone to get the warranty, I was given the name of some fly-by-night “roofer” company about 50 miles from here. No one answered the phone or returned a call.
Our home inspections revealed that the roof was not completely finished and had 2 different colors of shingles. The dormers had not been replaced and the old ridge vents had the end caps missing. The gutters were full of nails and debris with real “plants” growing out of all the gutters.
The buyers were concerned about the pool which was still green with open wires sticking out of the pool pump and pool heater…the inspector was not even able to inspect anything related to the pool. After I insisted that the “handyman” on site was not qualified to do electrical work, the listing agent acted concerned. The listing agent then agreed that he would personally hire the manager of a pool company (that was a friend of his) to fix everything that was wrong with the pool. The listing agent then called and said that everything had been fixed. He insisted that he was there personally and everything was done to perfection.
I started to feel better, until I learned that it was a big fat lie. We re-checked the property again and the pool was still the same green with the same exposed wires everywhere and the pool full of junk. Nothing had been fixed. Nada.
Do agents lie? Yep, they sure do. I don’t think the listing agent was expecting us to check on it again. We have learned through experience not to believe anything that we are told, so we do verify. As Exclusive Buyer Agents, we take our duties seriously…
So the bottom line was this…we were able to convince the seller to credit buyer $6K for completion of the needed repairs. The buyers were exhausted, but happy with that since the remainder of repairs were going to get completed properly by someone else.
So is the flipper house worth buying? Maybe, or maybe not. I have seen more flipper disasters rather than a good rehab. I say home buyers should tread lightly, and look past the “pretty parts”. Truth about Florida’s real estate flippers may not be so pretty.
In case you can not view this video here, please click the link below to view Truth about Florida Real Estate Flippers on my YouTube channel: https://www.youtube.com/watch?v=x_ftathArVY&feature=youtu.be
Friday, December 21, 2018
# 1 Know what the property is worthEvery property on the market has a value...yet most home buyers start making offers without knowing much about the property value. You should know that plus more...
- Is the property fairly priced at market value?
- Is it priced low to generate multiple offers?
- Is it overpriced because inventory is short?
- Does the seller just want top dollar?
- Did the listing agent skew the seller on a higher value to get the listing?
- Did the agent price it too low in order to look good by selling it quickly?
Yes, for sure all those are possibles...and the negotiations will be different.
A good buyers agent should be able to answer those questions for you before you start writing offers. In fact, they should tell you what the surrounding properties sold for and what more than likely the property is worth. With that information, you become a better informed home buyer, so that you will be able to sort through your buying options easier.
Florida’s appraisal problems: Right now, the market in Central Florida is selling quickly due to a shortage of good inventory. The real estate market has rebounded faster here than in other cities which has created a problem with appraisals coming in “short”.
“Short appraisal” means the property is being sold for more than the lender's appraiser says it is valued at. For example; let's just say the property is under contract for $400K but the appraiser says it is only worth $375K. Unless the seller is willing to drop the price to $375K, you will need to pay an additional $25K (out of pocket) in order to close on this property. That does not necessarily mean the house is not worth it...that depends upon other factors like...what else is available in your criteria?
#2 What to offer on the home?
Depends upon a lot of variables. Your offer should take into consideration many things:
- Supply & demand of homes...
- Who is the seller?
- How many buyers are making offers?
- +How long has it been on the market?
- How much money do you have?
- Are you financing?
- How is this home priced?
- How badly do you want the property?
Is this the only home you are interested in? If so, you should relax your criteria so that you always have 1 or 2 backup properties. That way you will not feel pressured into paying more than you should, or more than you want to pay.
If this property is nice and well priced, more than likely there will be multiple offers on the home and it will sell close to full price or more. Sometimes you may offer over full price and still not get the property. Other buyers in your price range are viewing the same homes and will think this house is worth bidding on....just like you do. I know that paying full price does not feel good to most home buyers, but depending upon your budget and criteria, that may be your only option. Stay flexible.
Financing: If you are financing, you should be pre-approved for your loan. Pre-qualified (PQ) means nothing to most sellers, as you can go on the internet and create a fake PQ letter for yourself. Yes, some home buyers do that also…
If you are serious about actually getting a home, then you should submit your financing documents to a lender who can verify your purchasing power. That improves your home buying power to “pre-approved” status which raises your credibility above other buyers who are only pre-qualified and puts you into an “almost cash” bracket.
Yes, cash does talk. However, a low cash offer does not trump a high financed offer. Cash will only be preferred over offers at about the same price. If you are in a multiple offer situation, the seller may ask all the potential buyers for their “highest and best”...that is your final chance to raise your offer to better compete...or you can stay at your original offer. About 40% of buyers offers in Central Florida are “cash”.
My buyers typically ask me what they should offer and this is my advice: Regardless of which state or country you are from, making offers on homes in Florida is not the same as back home. Your offer can be Low, Medium, or High.
Here are the offer facts:
A LOW OFFER on a nice property will probably result in the seller not responding to you or giving a counter offer at full price. More than likely, the seller will be insulted and no longer willing to be reasonable or sell to you. The only time that a LOW OFFER works is if the property has been on the market too long, or needs major rehab work.
A MEDIUM OFFER offer will open the door for the seller to negotiate.
A HIGH OFFER is necessary when there are other offers on the table, or if you need to finance, or if you need seller paid closing costs.
If you are the only buyer bidding on the property and you have cash or solid financing, I like to suggest coming in reasonably low. Low enough to leave room for negotiations, yet not so insulting that your offer will be shut down. A good buyers agent will know the difference and be able to advise you.
# 3 Hire the right agent
Last but not least..this is the most important. Just like all people in the service business, brokers have certain skills and personalities. If you want to buy a good house, not overpay, and get everything that you contracted for, you cannot hire a “newbie” or simply someone related to someone at your place of work. You need someone qualified to help you that is savvy, experienced, and not afraid to speak up for you.
Differences of opinion and re-negotiations often come up in all transactions that the agent for the buyer should resolve in the buyers best interest. Many agents are afraid to speak up for the buyer or bring up issues that otherwise may not be noticed. Some brokers have no clue what to say or do...and when that happens, the buyer is really on their own.
Unfortunately, most buyer’s don’t realize it, until it is too late to change agents. I know that for a fact, because they call our office for help when it is too late. Right now, you are learning facts that will help you become a smart homebuyer, so keep reading...
There are many kinds of brokers/agents in Florida and they all have different duties and levels of experience. Statistics from the Orlando Regional Realtor association show that in Central Florida, 38% of realtors have been in business less than 1-year. Only 64% of realtors sold one or more homes last year. I believe that it takes years of experience and hundreds of transactions to be adequately “experienced” enough to do a great job for the buyer.
Here are some more surprising facts:
Florida has no mandatory agency disclosures. That means they are not required to tell you who they really work for. Their job may be to sell the property for the highest price and most favorable terms for the seller...but they do not have to tell you that. Florida is a buyer beware state.
99.9% of Florida realtors work as “transaction brokers” with no fiduciary duties to either party. That means no loyalty for you. No full confidentiality for you either. Even if a broker says they will represent you as a transaction broker, the definition does not allow them to advocate for you. They are simply facilitators.
Buyer agents who work in a listing office may have an obligation to push company listings on you. They may even be paid a higher commission if they sell you one of the company listings...and they do not need to disclose that, so you will never know.
Exclusive Buyer Agents work in an office that never represents sellers. They have no conflict of interest as they only represent only the best interest of the home buyer with 100% loyalty, 100% confidentiality, 100% full disclosure.
Florida has about 300,000 licensed brokers to choose from. Less than 40 brokers represent only the home buyers as Exclusive Buyer Brokers. It is a rare niche because it takes a high level of confidence and competence to give up sellers and build a business representing only home buyers. Having an exclusive buyer agent on your side is priceless and at no added cost.
Call us for straight answers to all your questions 407-539-1053 and thank you for discovering the 3 Tips for negotiating a Florida Home.
Monday, December 03, 2018
#1 Misconception: The New Construction Builders Agent is there to “help” you, the buyer.
Not so. The New construction agent only works for the builder and their primary job is to “sell” you on the the community so you fall in love and want to buy in that community. Their loyalty, and confidentiality is only to the builder, never the buyer.
Whatever you tell the builders representative will be passed along to the builder. It is never their duty to give you “freebies” or lower the price. They will never disclose the negative facts in the contract or tell you that there is a landfill near by. Despite the fact that they look professional, smile nicely and act like your best friend, their legal and ethical obligation is ONLY to the builder/seller. Buyer Beware.
#2 Misconception: The institution where you do your banking is the best place to get your home loan.
Highly unlikely that they will do any favors for you. Unless you are a high net worth individual with $ big bucks $ in their coffer, you will be given the same deal as a stranger off the street will...nothing special.
Sure, it might make a difference if you are related to the bank president, but typically the loan officer for the bank will not be interested in rolling out the red carpet for you. Usually they are paid a salary and have no incentive if you close with them or not. In addition, banks have their narrow guideline slots that you must fit into. On the other hand, mortgage brokers have a choice of lenders that may better fit your borrowing profile.
Mortgage brokers have dozens of lending institutions that they can place your loan with depending upon the specifics of what you need. Mortgage brokers only get paid if you close. It does not cost more to use a mortgage broker. Also, your credit report (FICO Score) is not affected if your credit is pulled several times while you are shopping for a loan from multiple lenders.
#3 Misconception: Every seller will negotiate the price.
Many homebuyers believe there is an automatic discount off the list price. I wish that were true, but it is not. There is no “standard” reduction of price anywhere.
There are many factors that determine how the property is priced. The property may be priced low, priced at market value or overpriced. The seller may need to net a certain amount in order to pay off the mortgage. Or they may need a certain amount of money in order to move out and buy something else. Or the seller may price the property at a bare bones “take it or leave it” price”. Sometimes, the seller simply thinks their property is worth a lot more. Sometimes, the listing agent may inflate the value in order to keep the seller happy and get the listing.
...And sometimes you just have a stubborn seller that digs in their heels and is not going to budge a penny. The choice then is yours. You can either pay the price or keep looking.
#4 Misconception: Buying “as is” means that if you want the property, you have to buy it with its deficiencies.
Not so, but many agents believe that fallacy also. This is a misconception that many brokers want the buyers to believe, in order to avoid renegotiating the contract or bothering with repairs. Don’t be fooled.
An “as is” contract is simply putting the buyer on notice that the seller wants to sell the property “as is” and does not want to do any repairs. It does not mean the seller really will not fix anything...
If the contract is subject to the buyers inspections, that means the buyer has the right to do inspections and then have the option to say:
- “yes, I will take it’
- “no, I am no longer interested in buying”
- “I will buy, if the seller will fix A,B and C”.
Everything is negotiable, including having the seller fix deficiencies on an “as is” contract.
#5 Misconception: Calling the listing agent will save the buyer money.
Wrong, wrong and wrong. If you do...you will probably end up paying more, with less favorable terms. For sure there will be no one in your corner to promote your best interest.
Remember this...the listing agent represents the seller and their legal and ethical obligation is to sell the property for the highest price and most favorable terms for the seller. If you divulge how much money you have, or how high you will go, they will disclose that to the seller. That is the listing agents job. They are required to promote the property in the best light and not tell you anything that may make you walk away.
If you think that somehow the listing agent will cut their commission or give you some of it, you are again mistaken. The listing agent will be very happy to get double commission and keep it all in their own pocket. This is a perfect opportunity for the listing agent to simply make more money.
The listing agent does not owe you any loyalty, confidentiality, or full disclosure and most importantly they have no obligation to save you any money.
#6 Misconception: The bank only wants to break even on a foreclosure.
This fallacy is not even close. Banks are greedy, and they will always want to sell for top dollar and get the most money that they can.
Many home buyers think that the bank will sell the foreclosure for whatever the balance owed was. Not true. Whatever mortgage was owed is a moot point and not in consideration. The bank will typically get a couple of appraisal and list it for market value. Many times they will do a cheap rehab...paint and carpet and then want to sell for top dollar.
The only time you may get a bargain price is if the property is seriously distressed, or on the market way too long. The deep discounts are getting harder to find as banks have figured out that if they put a pinch of money into a fix up, they will get a lot more in return. Buyers mistakenly think that a bank foreclosure is always a sweet deal...which is simply another misconception.
#7 Misconception: There is no need for a home inspection on new construction.
Ahhh...there is always a need for a home inspection on new construction. New construction is big business with a shortage of quality workers or project managers.
Sometimes the builders quality control is not adequate and the city inspector does not catch all building mistakes.
Builder mistake examples: Missing hurricane straps, hot water flushing the toilets, improper wiring, missing insulation, door locks not fitting, steps not meeting the wall, flawed tile, loose banisters, crooked walls, bathroom drains clogged up, and roof not properly nailed.
There are two choices for new construction inspections:
- A phase inspection means that an inspector checks at certain “phases” of construction, which is a more thorough inspection.
- A comprehensive inspection done at home completion, before closing.
I am finding more and more builders removing some of their construction responsibilities after closing. In other words, if you don’t find and mention the problem before you close, the builder does not have to fix it after closing.
#8 Misconception: FSBO’s (For Sale by Owner) property will be cheaper.
Not a chance. The “FSBO” seller is not interested in giving home buyers a bargain price. They want to sell on their own in order to make more money for themselves.
Sometimes, the FSBO seller has already spoken to a listing agent who told them that their house is not worth as much as they think. Sometimes they simply avoid paying any commission, so they can pocket extra money.
I have never seen or heard of a FSBO seller that wants to sell on their own in order for the buyer to pay less. In fact, I have done studies that showed that most FSBO sellers are priced higher than average and unmotivated to sell. If they were motivated, they would list the property with a listing office in order to find a larger pool of buyers and sell quicker.
Which brings me to two more reasons that there are FOR SALE BY OWNER sellers:
- They want to deal with unsuspecting/unrepresented home buyers who will believe everything they tell them. Buyers that are looking at FSBO’s have no clue what the property is worth or the terms that they should negotiate in a contract. A buyer without an agent is usually naive and just what the FSBO seller is looking for.
- Seller is unable to be reasonable or flexible. They may owe too much debt on the property and must sell for top dollar or at least more than market value. They may also need stringent terms in the contract that are not customary.
#9 Misconception: Using the sellers/listing agent affiliate title company is OK
Here is the untold story: Most listing offices have an “affiliate business relationship” with a title company. They feed the title company their real estate business in exchange for some kind of benefit. While this is legal, it is NOT in the best interest of the homebuyer.
It is never advisable to use the listing office “partner” or sellers title agent, because they typically favor the seller. When that happens, the title agent will not dig deep for any problems as they do not want to “rock the boat” for the favored side. Instead of fixing a problem, I am seeing more title companies simply exclude the problem from the buyers title insurance policy. I am also seeing these “affiliates” have the buyer sign a waiver at closing agreeing that they will not sue the title company over their mistakes.
Often, the buyer is overcharged, or charged for items that the seller should pay. Fees for closing might not be shared equally but split in favor of the seller...Why should the buyer pay more than the seller for the same thing?
Affiliate title companies sometimes omit due diligence details for the buyer...like encroachments on the survey, liens on the property, or requesting a municipal lien search. I have seen many title mistakes and even serious mistakes like not transferring the entire portion of the property to the buyer.
Let's face it, when “favors” are being exchanged that is always an incentive for the title company to cater to the hand that feeds them. The buyer however does have a choice:
Contractually, whoever pays for the buyers title insurance gets to choose which company does the title work...that is a negotiable item in the contract...and the buyer needs to add that to the negotiations.
When a buyer is spending hundreds of thousands for a home, it is always smart to pay for their own title insurance and have a title attorney (on their side) to create the closing documents and review for any potential problems. That is the only way to avoid a headache and protect your ownership after closing.
#10 Misconception: All agents are the same...so just pick anyone.
If you believe that, you are likely to lose money on your home purchase. The fact is that there are different types of broker/agents, different levels of experience and they all have different duties and obligations.
You have the right to interview agents, ask them which side they work for and pick the one that best fits your needs. There are newly licensed agents with no experience, and seasoned agents that understand how to solve problems...you always need someone experienced. Most agents serve a particular niche, so here is a quick summary.
Sellers/Listing agent: Represents only the seller to get the highest price and most favorable terms for the home seller.
Transaction Broker: A middle person that facilitates a transaction with no fiduciary duties; no loyalty, no full confidentially, no full disclosure, no true representation.
Dual Agent: Represents both the buyer and seller in the same transaction. Neither side has full representation.
Buyer Agent: Works in a traditional office. May represent the buyer in certain transactions, may represent sellers, or may represent both.
Exclusive Buyer Agent: Works in an office that only represents home buyers with full fiduciary duties of loyalty, confidentiality, full disclosure. Never represents sellers or practices as a transaction broker or dual agent.
Fact: Home buyers and sellers have opposing interests. The seller wants to sell for more and the buyer wants to pay less. It is impossible to serve two masters.
Homebuyers are best served by using a dedicated Exclusive Buyer Agent whose only focus is the best interest of the home buyer. For Florida home buying call 407-539-1053 Outside Florida go to https://naeba.org 800-986-2322 to find an Exclusive Buyers Agent.
Hiring the right agent will keep you away from the 10 Biggest Home Buying Misconceptions...
In case you can not view this video here, please click the link below to view 10 Biggest Home Buying Misconceptions on my YouTube channel: https://www.youtube.com/watch?v=SVITqqwkbXY&feature=youtu.be.
Monday, October 22, 2018
There are almost 500 Orlando Lakefront homes for sale in Orange county. Add to that the the surrounding counties of Seminole, Lake, Osceola, Polk and there are about 700 more lake homes to choose from. Lake county was named as such because it has over 1,200 lakes. There are all kinds of lakefront homes, some are desirable and bring top dollar while other lake homes may appear like are bargain, but are not in demand.
It is my opinion that a quality lakefront home brings the highest price tag, are most desirable, supply is limited and they appreciate about 3x faster that of a dry lot property.
What determines the cost of Lakefront in central Florida?
- Quality of water
- Size of lake
- Clarity of lake water
- Sand bottom
- Running feet on the water
- Spring fed
- Unobstructed view of water
- Ability to have watercraft
- The city it it is located in
- …and of course the quality of the improvements on the property.
As a rule, the larger the lake, the higher the price tag. Centrally located lakes are a plus while rural lakes may be a bargain. A lake that allows for boating and skiing is always in higher demand. Lakefront homes on a Chain-of-Lakes are premium priced with a very limited supply of inventory Ask us for a custom list of waterfront homes for sale…sent to you by email 407-539-1053.
Buyer-Be-Aware: Lake properties described as “Lake access”, “Lake view”, “waterfront community”, “chain of lakes community”, “canal to lake home”, “canalfront’ …are not direct lakefront homes! There is a big difference in both the property quality and the price.
Buying a lakefront home
First you need to determine your budget and what your goals are for living on a lake. Do you want to boat, swim, or ski? Need a “fly in” lake for your plane? Or do you just want to fish for big bass? Or maybe you just want “to die for” gorgeous sunset views…or just serene privacy.
Lakes are sand bottom, muck bottom, clear water, brackish water, on water that shrinks in dry season and lakes that keep the same water level. Then there are swampy lakes only good for the beautiful view and natural habitat. There are lakes that are “chained” to other lakes where you can travel by water to other lakes and even north to the St. Johns river.
Sometimes the waterview is obstructed with Cypress Trees which is a protected species. Sometimes there is a road separating the home from the lake…or there is a big distance between the lake and the house. These obstructions are not desirable for most homebuyers looking for prime lakefront property but on the other hand, there is nothing more beautiful than the privacy of living on water…any waterfront.
The brokers at Buyers Broker of Florida live on lakes and understand waterfront. There are a lot of factors that go into determining how valuable the lakefront property is. For more information call us for a no pressure chat. Or ask for Mike Alexander…he has broad knowledge of Central Florida lakes and will share his vast knowledge about lakes with you. 407-539-1053
Sizes of Lakes in Florida
At the bottom of the state sits Lake Okeechobee, the largest lake in Florida. The massive body of water covers 448,000 acres…or about 700 square miles. The lake is relatively shallow at an average of 9 feet. Some say that it is the best Bass fishing lake in America, but due to lots of “gators”, it is not a lake you want to swim in. You can also rent a boat on Lake Okeechobee to explore on your own.
Lakes in central Florida come in many sizes, various views and quality of water…both in boating and fishing lakes. As a waterfront buyer, you do have a choice in the type of lake and the city you wish to reside in. Tell us what your ideal water property is…
Properties on “Chains of Lakes” are always a premium
There are many kinds and sizes of lakes to choose from, but fewer choices when it comes to living on a chain of lakes. The lakes that are on a “chain of lakes” allow you to access the other lakes that are on the “chain” by boat. These lakes are typically the largest and also the priciest. The “chain” can access just one other lake or up to 13 other lakes.
One of the most coveted is the Butler Chain of Lakes. Living on the Butler Chain is always sought after for the excellent water quality and beauty of natural habitat. Florida’s Department of Environmental Regulation promotes this chain as “Outstanding Florida Waters”. Located in the town of Windermere, the 4,720 acre chain is made up of 12 lakes: Lake Butler, Lake Tibet, Wauseon Bay, Lake Bessie, Lake Louise, Lake Isleworth, Lake Down, Lake Chase, Lake Blanche, Lake Sheen, Pocket Lake, and Fish Lake.
Do all lakes have alligators?
Maybe not all, but most for sure. Alligators may be anywhere where there is water…ponds, rivers, lakes, marshes, swamps and even man-made canals. In Florida, while there may be a lake with no gators, there is no guarantee that there will never be a gator in there. Alligators travel across land if their food source runs low or if there is a connection drain or canal to another lake.
Lakes that are surrounded by residential properties may have few or no gators. While gators shy away from lake activity, a few lakes that are loaded with gators are not lakes for recreation swimming.
I live on a lake with no gators because it is a very active lake with boating, skiing and seaplanes. Plus there is no headwater lake that flows into it, so it is not accessible to gators.
While the news carries serious fatal gator conflicts with humans, that is very rare and usually the person mistakenly ventured into gator territory. More often, a gator may snatch a pet that is too close to the water.
Buying Lakefront Lots in Orlando
True story: I had lunch with a friend who owns a survey company and she relayed this story to me: A buyer just closed on a lakefront lot and then decided to order a survey from her company. Lo and behold, the entire parcel that the buyer purchased was in the lake…nothing was on dry land. He was devastated…with no recourse. The “land” that he walked, viewed and thought was his, actually belonged to the neighbor.
Here are the facts: Just because you buy a large 5 acre waterfront parcel does not mean you actually own a 5 acre buildable lakefront lot. Three of the five acres could be inside the lake and the rest could be wetlands, or some other protected vegetation that cannot be built on. Or you might be planning on removing the row of trees blocking the beautiful view, only to later learn that they are protected cypress trees that you can’t cut or even trim. And there is more…don’t forget that “high water mark” of the lake will dictate the setbacks from where you can build.
If you are considering buying a lakefront property, do the proper investigation and don’t rely on what the seller or the listing agent “think”. Hire us to help you navigate the pitfalls of buying vacant land. 407-539-1053
Waterfront lot purchase example: The last vacant waterfront lot that we helped our buyer purchase was on Lake Tibet, a 1,200 acre lake that is part of the prestigious Butler Chain of Lakes. The lot was “raw”…meaning that it was undeveloped and not cleared. It was so dense that you could not walk the lot, so you could not tell anything. Most lots need additional work at an additional cost that needs to be factored into the budget.
Many waterfront lots are spongy and not high and dry…something that you should know before you buy. Lakefront lots are also not cheap, so it is imperative that you perform the right tests, so you do not waste your hard earned money. A prime waterfront lot starts at about $1Million dollars$+ while rural lakes on unpaved roads may look like a bargain. Getting proper inspections is critical and not the time to cheap out and skip your investigations. Read on to get a better picture of what to inspect…
So here are the inspections that we did on this lakefront parcel:
1. First we did a new survey. The seller did have an old survey, but that should not be relied on…shorelines may have changed and the old surveyor might not have used the newest equipment. If you opt to choose the sellers old survey and it is not accurate, you have no one to complain to or have any recourse for relief. It is critical to get your own survey from an experienced waterfront surveyor.
2. Then we did a topography study. It is a detailed map showing the configuration, of the earth surface. It also shows the shoreline, boundaries, vegetation, wetlands, size of trees and the high water mark. The high water mark determines the setback from where you can build. In this case the buildable land was a bit smaller than the seller indicated, so we were able to re-negotiate the price and save the buyer almost $100k on a price reduction…(yes, after inspections).
More things to consider when buying a lakefront lot:
- What is the lot zoned for? That will determine what you can build.
- Is there city water on site? If not, a septic system and well will be required.
- How far is the access to electricity, natural gas or sewer?
- Is road access included, or will you have a private road to maintain?
- Are there any liens or encroachments?
- What about environmental restrictions?
- Is it in a flood zone? What about insurance?
Maybe, if the lot is low or the house sits too low on the lot. Ideally the property needs to have been built high and dry.
Will I need flood insurance?
Maybe or maybe not. Not all waterfront property is in a flood zone. However, keep in mind that your regular homeowners insurance may cover water damage, but not if it is from rising water. Check the coverage.
Will the lake dry up during dry season?
The water level could drop and make parts of the lake not navigable…especially canals. The water will come back during rainy season which starts in the month of June. If the lake is spring fed, it will maintain the same water level all year round.
Can I build a dock?
Yes, but you have to follow the local city rules and the St. Johns water management guidelines. You will also have certain guidelines for septic when living on a lake.
Call us to discuss your best home buying options: 407-539-1053
Buyers Broker of Florida helps homebuyers find the right lakefront home. We understand the difference between prime lakefront property and just a lake. We also know what it takes to build on a vacant waterfront lot. Ask us for a free list of Orlando Lakefront Homes for sale.
In case you can not view this video here, please click the link below to view Orlando Lakefront Homes for Sale on my YouTube channel: https://www.youtube.com/watch?v=-pKkSjDm4HM&feature=youtu.be
In case you can not view this video here, please click the link below to view Orlando Lakefront Homes for Sale on my YouTube channel: https://www.youtube.com/watch?v=-pKkSjDm4HM&feature=youtu.be